A bench headed by Justice G S Singhvi asked the Centre to file its reply to the PIL which said a model devised by AIIMS, under which it provides medicines and surgical items at 56 percent discount on Maximum Retail Price (MRP), should be adopted by all government hospitals.

"It is most respectfully and humbly prayed that the court issue appropriate direction to all government owned and aided health care establishments to incorporate a model devised and implemented by the All India Institute of Medical Sciences which ensures that medicines and surgical items and other such items are made available at 56 percent discount on MRP," the petitioner Avinash Goenka said.

He submitted the cost of manufacturing a drug is relatively low but medicines are being sold at inflated prices which needs to be curbed.

"In pharmaceuticals sector, the cost of manufacturing a drug is relatively low, compared to the price it is sold at. By selling drugs at inflated prices, big companies and retailers pocket a large unjustified share of the money, paid by the consumer," he said in his petition.

"There are abnormally high trade margins with wasteful, unregulated and unethical drug promotion. There is a nexus between drug companies, stockists, retailers, medical representatives and some medical practitioners which disproportionately inflates the cost of medicines and overall treatment," the petition said.